Shares in IOOF Holdings have lost more than a quarter of their value after the prudential regulator moved to disqualify the beleaguered wealth manager’s top brass and impose new license conditions.
IOOF shares were down 28 per cent after half an hour of trade after the Australian Prudential Regulation Authority today said it had begun proceedings to disqualify five IOOF employees.
They included the managing director, chairman and chief financial officer. The move would make them ineligible to be pension fund trustees for failing to act in their members’ interests.
The regulator said it has had concerns about conflicts of interest at the financial services firm since 2015, adding it had failed to address the issues for years.
“APRA’s efforts to resolve its concerns with IOOF have been frustrated by a disappointing level of acceptance and responsiveness,” APRA deputy chair Helen Rowell said in a statement.
APRA is also seeking to impose additional conditions on the firm.
The move could threaten to derail IOOF’s $975 million purchase of ANZ’s financial planning businesses.
IOOF in October 2017 agreed to buy ANZ’s Australian OnePath Life business and some financial planning operations for $975 million, but ANZ said today it was urgently seeking clarification over APRA’s intervention.
“Given the significance of APRA’s action, we will assess the various options available to us while we seek urgent information from both IOOF and APRA,” ANZ deputy chief executive Alexis George said.
The company said the matters concerning the licence conditions largely covered initiatives that were already in progress, or had been completed, in consultation with APRA.
“IOOF believes that these allegations are misconceived, and it and its executives intend to vigorously defend the proceedings,” the company said in a release.
IOOF is already in the midst of a restructure brought on by regulatory pressure and scrutiny of its business model during the financial services royal commission.
The company must respond to APRA’s show cause notice within 14 days.
IOOF shares were down $2.525, or 35 per cent, to $4.645 at 12.52pm.
They were at an all-time high of $11.84 in October 2017.